Midlands market tough for Segro as pre-tax profit slumps

THE Midlands occupier marker in the warehousing and logistics sector remains “the most challenging” for commercial property company Segro.

The plc said today there was limited interest in occupancy, particularly in larger units, in its Midlands operations where it owns Meteor Park and King Norton Business Centre, both in Birmingham.

The comments were published in its half-year results for the period ended June 30, 2011, during which net rental income fell year-on-year from £144.3m to £135.5m and pre-tax profit dropped sharply from £148.9m to £64.6m.

The firm, headquartered in Slough, said it had suffered valuation declines in other areas of the portfolio including in Birmingham, Manchester and certain Continental European assets which represented 24% of the portfolio.

Chief executive David Sleath said: “Against a backdrop of slowly recovering occupier markets, our key priority has remained operational delivery, focused on customer retention, leasing, cost control and pre-let development.

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“We remain mindful of the broader economic and financial risks currently affecting markets and continue to take a prudent approach to managing the business.

“However, I am pleased with the operational results we have achieved in the first half and am confident that Segro will continue to make further operational progress.”